Ghana Tax Data Cards. February 2016

Transcription

1 Tax Data Cards February

2 Contents Tax Data Cards A. Corporate Tax Rates B. Location Incentives C. Free Zone Enterprise D. Gains on Realisation of Assets or Liabilities and Gifts Received E. Unrelieved Losses from Business or Investment F. Temporary Tax Concessions G. Capital Allowances H. Additional Deduction for Companies that Employ Fresh Graduates I. Withholding Tax Rates (Residents) J. Withholding Tax Rates (Non-Residents) K. Individual Income Tax Rates L. Personal Reliefs M. N. O. P. Q. R. S. T. U. V. Mortgage Deduction Benefits-in-Kind Double Tax Treaties Value Added Tax National Health Insurance Levy Overtime Bonus Tax Calendar Royalties Special Taxes

3 s 1 A Corporate Tax Rates General 25% Hotel Industry 22% Non-Traditional Exports 8% Financial Institutions in respect of income from financing farming enterprises 20% Financial Institutions in respect of income from financing leasing companies 20% Petroleum Operations 35% Mineral and Mining Operations 35% Trust 25%

4 s 2 B Location Incentives (Restricted to Manufacturing Companies not Involved in Export of Non-Traditional Goods and Free Zone Enterprise Operations) Regional capitals other than Accra and Tema Elsewhere other than Regional Capitals 25% Tax Rebate 50% Tax Rebate C Free Zone Enterprise Free Zone Enterprises enjoy a tax holiday for the first ten years starting from date of commencement of operation (After Tax Holiday) Income from sales to Foreign Market (Export) Income from sales to the Local Market RATE 15% 25% 2015 KPMG, a ian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

5 s 3 D Gains on Realisation of Assets or Liabilities and Gifts Received Any gains on realization of assets or liabilities as well as gifts received in relation to a business, employment or investment are taxed in accordance with the source of income Individual may opt for 15% tax rate on the gain realised from the assets and liabilities Unrelieved Losses from Business or Investment Specified priority sectors can utilize unrelieved losses for any of the previous five years of assessment All other sectors can utilize unrelieved losses for any of the previous three years of assessment Unrelieved losses made on the completion of long-term contracts can be carried back against profits reported in prior years NOTE (a) The tax authorities are yet to come out with the list of companies in priority sectors. (b) Unrelieved losses means the amount of a loss that has not been deducted in calculating the income of a person.

6 s 4 F Temporary Tax Concessions The following enjoy tax concessionary rate of 1% on their chargeable income Certified companies that construct low cost residential premises for sale or letting - First five years Farming Enterprise conducted by an individual: Tree Crop - First ten years from 1st harvest Livestock (other than cattle and fish) and Cash Crops - First five years from commencement Cattle - First ten years from commencement Agro-Processing Business Company producing cocoa By-Products from cocoa waste Processing of Waste for agricultural or commercial purpose Rural Banking Approved Unit Trust Scheme and Mutual Fund Venture Capital Financing Company - First five years from commercial production - First five years from commencement of commercial production - First seven years from commencement of the business - First ten years from establishment of business - First ten years from commencement of operations - First ten years after Company first qualifies

7 s Tax Data Cards G. 5 G Capital Allowances Class Qualifying Assets Depreciation Rate 1 40% 2 30% 3 20% NOTE 4 5 (a) (b) (d) Classes 1, 2 and 3 qualifying assets are depreciated on a reducing balance basis. Classes 4 and 5 qualifying assets are depreciated on straight line basis. The cost of a road vehicle other than a commercial vehicle shall not exceed GH 75, Capital allowances are required to be utilized in the year in which they are granted. 10% 1 divided by the useful life of the asset in the pool

8 s Tax Data Cards 6 H Additional Deduction for Companies that Employ Fresh Graduates During the Year Percentage of Fresh Graduates in Workforce Percentage of Salaries / Wages - of Such Employees deductible from profits Up to 1% 10% Above 1% but not more than 5% Above 5% 30% 50%

9 s s 7 I Withholding Tax Rates and Status Payments to Residents (a) General Rate Status (i) Dividend, including capitalization of profits 8% Final (ii) (iii) Dividend paid to persons from petroleum operations Dividend paid to persons from mineral operations 8% Final 8% Final (iv) Interest 8% On Account (v) Lottery winning exceeding GH 2,592 5% Final (vi) Royalties and natural resource payment 15% On Account (vii) Rent on properties (Payment to an individual) Business income Residential Non-Residential 8% On Account 15% On Account

10 s s 8 I Withholding Tax Rates and Status (Continued) Payments to Residents (a) General Rate Status (vii) Rent on properties (Payment to an individual) Non-Business income Residential Non-Residential 8% Final 15% Final (viii) Rent on properties (Payment to persons other than an individual) Business income Residential Non-Residential Non-Business income Residential Non-Residential 8% 15% 8% Final 15% Final On Account On Account (ix) Tax on petroleum subcontractors 15% On Account

11 s 9 I Withholding Tax Rates and Status (Continued) Payments to Residents (a) General Rate Status (x) Payments made to a person who conducts a relevant transport business other than as a result of transhipment 15% On Account (xi) Payments for rental of containers and related equipment which are supplementary or incidental to the relevant transport business above 15% On Account (xii) Payments for unprocessed precious minerals located or won in 3% On Account (xiii) Payments due to persons who conduct business of transmitting or receiving messages by cable, radio, optical fiber or satellite or electronic communication 15% On Account

12 s 10 I Withholding Tax Rates and Status (Continued) Payments to Residents (a) General Rate Status (xiv) Commission paid to an individual as a sales agent 10% On Account (xv) Service fees paid to an individual for examining, invigilating or supervising an examination, or part time teaching or lecturing 10% Final (xvi) (xvii) Fees or allowances, to a resident director, manager trustee or board member of a company or trust Commission paid to an individual as a resident insurance, sales or canvassing agent 20% On Account 10% On Account (xviii) Endorsement fees to an individual 10% Final (xix) Any other service provided by an individual 15% On Account

13 s 11 I Withholding Tax Rates and Status (Continued) Payments to Residents (a) General Rate Status (xx) Commission to an individual as a resident lotto receiver or agent 10% On Account (xxi) Contract payments for the supply or use of goods 3% On Account (xxii) (xxiii) Contract payments for the supply of works Contract payments for the supply of services ( Refer to items (xix) and (ix) for rates applicable to individuals and petroleum subcontractors) 5% On Account 7.5% On Account

14 s 12 I Withholding Tax Rates and Status (Continued) Payments to Residents (b) Payments to Residents Exempt from Withholding Tax Exemption of withholding tax on payments to residents apply to the following: (i) Dividend - - a Company receiving dividend, that controls, directly or indirectly, 25% or more of the voting power in the Company paying the dividend (this does not apply to petroleum, minerals and mining operations) dividend or interest paid or credited to a holder or member of an investment in an approved unit trust scheme or mutual fund The exemption does not apply to: dividend paid to petroleum and mining operations dividend paid to a Company by virtue of its ownership of redeemable preference shares in the Company paying the dividend dividend arising out of adjustments carried out to comply with the arm's length standard and income splitting

15 s 13 I Withholding Tax Rates and Status (Continued) Payments to Residents (b) Payments to Residents Exempt from Withholding Tax Exemption of withholding tax on payments to resident apply to the following: (ii) (iii) Interest The withholding tax on interest paid by a resident person to another resident person does not apply to: interest paid to a resident financial institution interest paid to an individual by a resident financial institution or on bonds issued by Government of payments made by an individual, unless made in conducting a business payments that are exempt amounts Contract Payments Withholding tax on contract payments does not apply: to payments under a contract not exceeding two thousand cedis - (GH 2,000.00) to payments under a contract for the sale of goods which constitute trading stock of both the vendor and the purchaser to premium paid to registered resident insurance companies where the Commissioner-General grants an exemption

16 s Tax Data Cards Payments to Residents Exempt from withholding tax (Continued) 14 I Withholding Tax Rates and Status (Continued) Payments to Residents (b) Payments to Residents Exempt from Withholding Tax (iv) Payments - for unprocessed precious minerals The - withholding tax on unprocessed precious minerals does not apply to: - a payment made by an individual, unless the payment is made in the course of conducting a business - a payment made by the holder of a small scale mining licence to a labourer with respect to winnings from the area covered by the licence - a payment received by a holder of a large scale mining lease (v) Lottery winnings The payment of lottery winning not exceeding two thousand five hundred and ninety two cedis (GH 2,592.00) is exempted from withholding tax.

17 s Tax Data Cards 15 J Withholding Tax Rates and Status (Continued) Payments to Non-Residents (a) General Rate Status (i) Interest 8% Final (ii) Dividend 8% Final (iii) Lottery winnings exceeding (GH 2,592) 5% Final (iv) Royalties and Natural Resource Payment 15% Final (v) Rent on properties - Residential - Non-Residential 8% 15% Final Final (vi) Management and technical service fees 20% Final (vii) Contract payments for the supply of any services 20% Final

18 s 16 J Withholding Tax Rates and Status (Continued) Payments to Non-Residents (a) General Rate Status (viii) An insurance premium with a source in 5% Final (ix) Service fee with a source in 20% Final (x) Tax on petroleum subcontractors 15% Final (xi) Payments for unprocessed precious minerals located or won in 3% Final (xii) Payments received by a person who conducts a relevant transport business other than as a result of transshipment 15% Final

19 s Tax Data Cards 17 J Withholding Tax Rates and Status (Continued) Payments to Non-Residents (a) General Rate Status (xiii) Rental of containers and related equipment which are supplementary or incidental to the relevant transport business above 15% Final (xiv) Payments received by a person who conducts a business of transmitting or receiving messages by cable, radio, optical fiber or satellite or electronic communication 15% Final NOTE (a) For items (viii) and (ix) above, the Commissioner-General should be notified within thirty days and may direct that the withholding tax rate be applied on part or the whole of the amount. (b) With the exception of Items (iii), (iv) and (xii), all other payments listed above made to a non-resident with a ian Permanent Establishment are considered as tax payment on account.

20 s Tax Data Cards 18 K Individual Income Tax Rates - Residents First Next Next Next Exceeding Chargeable Income(GH ) 2,592 1,296 1,812 33,180 38,880 Rate Nil (Free) 5% 10% 17.5% 25% (a) The tax rate for non-residents is 20%. (b) The chargeable income of an individual includes gains from the realization of investment. An individual may elect for the gains on investment to be taxed at 15% after deducting associated losses.

21 s s 19 L Personal Reliefs i. Dependent spouse or at least two (2) children - Gh 200 ii. iii. iv. Old Age GH 200 for an individual who is sixty (60) years or more Children's Education GH 200 per child or ward in any recognised registered educational institution in, up to a maximum of three (3) children Disability Relief - 25% of the assessable income of an individual who has a disability v. Aged Dependants - GH 100 in the case of an individual with a dependant relative, other than a child or spouse, who is 60 years or more (up to a maximum of two (2) dependants) vi. Training and Development relief Relief equivalent to the cost of training and not more than GH 400 for training to update the professional, technical, or vocational skills or knowledge of that person

22 s Tax Data Cards 20 M Mortgage Deduction Mortgage interest incurred during the year in respect of only one residential premises during the lifetime of the individual is allowed as a deduction in arriving at the individuals chargeable income.

23 s Tax Data Cards 21 N Benefits-in-Kind 1. Motor Vehicle Benefits Driver and vehicle with fuel 12.5% of total cash emoluments up to a maximum of GH 600 per month 10% of total cash emoluments up to a maximum of GH 500 per month Vehicle only 5% of total cash emoluments up to a maximum of GH 250 per month 2. Accommodation Benefits 5% of total cash emoluments up to a maximum of GH 250 per month Accommodation with furnishing Accommodation only Furnishing only Shared Accommodation 10% of total cash emoluments 7.5% of total cash emoluments 2.5% of total cash emoluments 2.5% of total cash emoluments

24 s 22 N Benefits in Kind (Continued) 3. Loan Benefits Conditions i) The loan should be from the employer to the employee. ii) The loan should have a tenure not exceeding 12 months. iii) Aggregate amount of the loan and any similar loans outstanding at any time during the previous twelve (12) months should not exceed the employees three (3) months basic salary. Tax Treatment - No benefit will be assessed on the employee as employment income where the conditions above are satisfied - In any other case interest benefit is computed for the year as: a quarter of the interest imputed at the Bank of rediscount rate (BOGR) minus interest paid by the employee during the year (i.e. ¼ x (Interest imputed BOGR Interest paid during the year)

25 s Tax Data Cards 23 O Double Tax Treaties Country Dividends Interests Royalties Management and Technical fees United Kingdom 7.5^ / 15^^ France 5* / 7.5** / 15^^ 10* / 12.5** 10* / 12.5** 10 The Netherlands 5^ / 10^^ Germany 5^ / 15^^ Italy 5^ / 15^^ South Africa 5^ / 15^^ 5# / 10^^ Belgium 5^ / 15^^ Swiss Confederation 5^ / 15^^ Denmark 5^/ 5 /5 15^^ 8 8 8

26 s Tax Data Cards 24 O * ** ^ ^^ # Double Tax Treaties (Continued) If the company paying the amount is a resident of France If the company paying the amount is a resident of If the beneficial owner is a company which holds directly at least 10% of the capital of the company paying the dividend In all other cases If the interest is derived by a Bank which is a resident of the other contracting state If the beneficial owner is the other contracting state or the central bank of the other state or any national agency or any agency (including a financial institution) owned or controlled by the government of that other state. If the beneficial owner is a pension fund or other similar institution providing pension or other similar institutions where it is established and recognised for tax purposes in accordance with the law of that other state. By virtue of Act 896 and the Non-Discrimination clause under the Double Taxation Treaties, where the tax rates above exceed the domestic tax rate under Payments to Non-Residents the domestic tax rate applies.

27 s Tax Data Cards 25 P Value Added Tax (VAT) Taxable Supplies - Standard Rate 15% Taxable Supplies - Exports 0% The VAT Act also provides for Exempt Supplies and Relief Supplies. Q National Health Insurance Levy (NHIL) Taxable Supplies - Standard Rate 2.5% Taxable Supplies - Exports 0%

28 s 26 R Overtime Qualifying Annual Employment - Income Limit of Benefit GH 9,600 50% of Qualifying Income Up to More Than Monthly Overtime (GH ) 50% of basic salary 50% of basic salary Rate 5% of the overtime that qualifies 10% of the overtime that qualifies S Annual Bonus Annual Bonus (GH ) Rate Up to 15% of annual basic salary 5%of the bonus that qualifies More than 15% of annual basic salary (add excess payments to employment income)

29 s Tax Data Cards 27 T Tax Calendar 1. Corporate Taxes Instalment Tax Payment 1st Instalment (25%) 2nd Instalment (25%) 3rd Instalment (25%) 4th Instalment (25%) Top-up 2. Others Description Withholding Taxes: Payment to Resident and Non-Resident Value Added Tax National Health Insurance Levy Due Date By end of 3rd month of accounting year By end of 6th month of accounting year By end of 9th month of accounting year By last working day of accounting year By fourth (4th) month following end of accounting year Due Date By 15th of the month following month in which deductions occurred By end of the following month By end of the following month Fuel network only of independent member firms affiliated with KPMG International Cooperative (KPMG

30 s 28 U Royalties Mining - 5% of Total Revenue V Special Taxes Instalment National Fiscal Tax Stabilization Payment Levy (On Selected Enterprises) Due Date - 5% of Profit before Tax

31 In